Shares of Lucid Group Inc (LCID.US) experienced extreme volatility, plummeting as much as 57% during Tuesday's trading session. This marked the stock's largest single-day decline on record, though it later pared losses to close 16.15% lower. The severe price swings triggered multiple trading halts.

The electric vehicle manufacturer is working with restructuring advisors to address its operational challenges. According to sources, the consultancy AlixPartners has been hired to conduct a comprehensive review of Lucid Group Inc's operations. The company's goal is to streamline its business, reduce costs, and ensure the successful launch of its new mid-size vehicle platform. Lucid Group Inc later confirmed in a statement that it is collaborating with AlixPartners.

Lucid Group Inc firmly denied recent speculation about a potential bankruptcy filing, calling the rumors "completely false." The company stated, "We have sufficient liquidity to support our operations into next year." The current focus is on improving execution and operational efficiency. "AlixPartners is assisting us with just that, nothing more, and has not advised management or the board to pursue a bankruptcy filing."

Lucid Group Inc's stock has declined 56% year-to-date as of Tuesday's close, reflecting the deep troubles facing the EV maker. Since its 2021 debut via a roughly $4 billion SPAC merger, the company has yet to report a profit on an adjusted basis. As of March 31, its long-term debt, excluding lease liabilities, stood at approximately $2.76 billion, with cash reserves around $700 million.

In recent weeks, Lucid Group Inc has suspended production guidance, initiated an operational review, and announced significant layoffs. New CEO Silvio Napoli is undertaking a broad management restructuring, which includes eliminating the Chief Operating Officer role and appointing a new Chief Financial Officer.

As one of the few U.S. automakers dedicated solely to battery-electric vehicles, Lucid Group Inc currently produces two models: the Air luxury sedan and the Gravity SUV. The company is also developing a mid-size platform, with a focus on autonomous driving technology, including a partnership with Uber for robotaxis.

Lucid Group Inc continues to grapple with multiple challenges, including production bottlenecks, supply chain disruptions, and rising costs. These pressures are compounded by the Trump administration's tariffs and the rollback of EV purchase incentives. A broader slowdown in U.S. electric vehicle sales has prompted several automakers to reassess their EV strategies and shift investment back toward combustion-engine vehicles.

It remains uncertain what more drastic measures Lucid Group Inc might take if its current restructuring efforts fail. The company has relied on funding from its largest shareholder, Saudi Arabia's Public Investment Fund, to sustain operations while developing new vehicles. Media reports on Tuesday suggested the strategic options under consideration could include taking the company private or filing for Chapter 11 bankruptcy protection.

Needham analyst Chris Pierce noted that a bankruptcy for Lucid Group Inc is "not impossible" if Saudi support were withdrawn, but added that "Saudi support has been consistent." Needham's models indicate the company must raise over $5 billion within the next three years.